Sigma Lithium — M&A Activity 2020

Jun 11, 2020

Execution Version (Redacted)

SUPPORT AGREEMENT

This support agreement (the “ Agreement ”) sets out the terms and conditions upon which [Redacted] (the “ Supporting Noteholder ”), as a holder of Existing Notes issued under the second amended and restated indenture dated as of July 29, 2016 among Sherritt International Corporation (“ Sherritt ”), certain guarantor subsidiaries of Sherritt, and Computershare Trust Company of Canada as trustee, acknowledges and agrees to Sherritt’s proposed transaction (the “ Transaction ”) on the terms set forth in the plan of arrangement attached to Sherritt’s management information circular dated March 6, 2020 (the “ CBCA Plan ”), as such CBCA Plan shall be amended by Sherritt (the “ Amended CBCA Plan ”) to reflect the terms set out in the term sheet attached as Schedule “A” hereto (the “ Term Sheet ”). Capitalized terms used but not otherwise defined herein shall have the meaning given to such terms in the CBCA Plan or the Term Sheet, as applicable.

In consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), each of Sherritt and the Supporting Noteholder covenants and agrees as follows:

1. Acknowledgements, Agreements, Covenants and Consents of the Supporting Noteholder

2. (a) Subject to the Term Sheet, the Supporting Noteholder supports and consents to (i) the Transaction and the Amended CBCA Plan, provided that the amendments made to the CBCA Plan as part of the Amended CBCA Plan are consistent with this Agreement and the Term Sheet and are acceptable to Sherritt and the Majority Ad Hoc Noteholders, acting reasonably, (ii) the Interim Order granted by the Ontario Superior Court of Justice (Commercial List) (the “ Court ”) on February 26, 2020, as amended by the Amending Order granted by the Court on March 23, 2020, and (iii) an order of the Court approving the Amended CBCA Plan (the “ Final Order ”), provided that the Final Order is consistent with this Agreement and the Term Sheet and is satisfactory to Sherritt and the Majority Ad Hoc Committee Noteholders, acting reasonably.

3. (b) The Supporting Noteholder agrees to (i) vote (or cause to be voted) all of its Existing Notes in favour of the Transaction and the approval, consent, ratification and adoption of the Amended CBCA Plan (and any actions reasonably required in furtherance thereof which do not require the Supporting Noteholder to incur any obligation or liability); (ii) support the approval of the Amended CBCA Plan and any motion(s) to effectuate the Transaction and the Amended CBCA Plan, which support shall not require the preparation or filing of separate materials with the Court unless the Supporting Noteholder determines to do so; (iii) not take any action (or inaction) that is inconsistent with the terms of this Agreement or the Term Sheet; and (iv) waive any and all rights it may have to challenge the Transaction or the Amended CBCA Plan, so long as such Transaction and Amended CBCA Plan are in accordance with the Term Sheet.

4. (c) Until such time as this Agreement has been terminated in accordance with its terms, the Supporting Noteholder agrees not to sell, assign, transfer, encumber, lend, pledge, grant a security interest in, option or otherwise convey or dispose of any its Existing Notes or any right or interest therein (direct or indirect), or enter into any

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   • agreement, contract, or other arrangement with respect to the foregoing in a manner which would prevent the timely performance of the obligations of the Supporting Noteholder hereunder; provided that the Supporting Noteholder may transfer some or all of its Existing Notes to: (i) any other fund managed by the Supporting Noteholder for which the Supporting Noteholder has the voting and investment discretion, including discretionary authority to manage or administer funds, and continues to exercise investment and voting authority with respect to the transferred Existing Notes and such Supporting Noteholder shall continue to be bound by this Agreement in respect of any such Existing Notes, (ii) any other Noteholder that enters into a similar agreement to this Agreement with Sherritt, in which event, the transferor shall be deemed to relinquish its rights (and be released from its obligations) under this Agreement in respect of such transferred Existing Notes, and (iii) any other Person provided that, in each case, prior to such transfer, such Person has entered into an agreement with Sherritt with respect to the transferred Existing Notes such that the transferee is bound by the obligations under this Agreement, in which event, the transferor shall be deemed to relinquish its rights (and be released from its obligations) under this Agreement in respect of such transferred Existing Notes.

6. (d) The Supporting Noteholder agrees to execute any and all documents and perform (or cause its agents and advisors to perform) any and all acts reasonably required by this Agreement to satisfy its obligations hereunder.

7. Acknowledgements, Agreements, Covenants and Consents of Sherritt

8. (a) Sherritt consents and agrees to the terms of, and the transactions contemplated by, the Term Sheet.

9. (b) Sherritt shall diligently pursue the completion of the Transaction in good faith by way of the Amended CBCA Plan and in a manner consistent with the terms of this Agreement and the Term Sheet, and shall not take any action (or inaction) that is inconsistent with the terms of this Agreement or the Term Sheet.

10. (c) The Final Order approving the Amended CBCA Plan shall be in a form mutually agreed to by Sherritt and the Majority Ad Hoc Committee Noteholders, acting reasonably, and in a manner consistent with the terms of this Agreement, and such order shall be subject to any amendments that are required by the Court, provided that any such amendments are acceptable to Sherritt and the Majority Ad Hoc Committee Noteholders, acting reasonably, and in a manner consistent with the terms of this Agreement.

11. (d) Sherritt acknowledges and agrees that it shall keep confidential the names and amounts of Existing Notes set forth on the Supporting Noteholder’s signature page to this Agreement and shall not disclose such information other than (i) to its directors, employees, counsel and advisors that require such information in connection with the Transaction and are advised to keep such information confidential pursuant to the terms hereof, (ii) as required by applicable laws, or (iii) with the consent of the Supporting Noteholder, and provided that Sherritt shall be

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entitled to disclose the aggregate holdings of the Ad Hoc Committee Noteholders that enter into a similar agreement to this Agreement with Sherritt.

• (e) Sherritt acknowledges and agrees that it shall pay the reasonable fees and expenses of Bennett Jones LLP, the legal advisors to the Ad Hoc Committee Noteholders, in accordance with the written agreement entered into between Sherritt and Bennett Jones LLP, as set forth in the Term Sheet, which Sherritt agrees it will not terminate until the earlier of termination of this Agreement or consummation of the Transaction, provided that the Ad Hoc Committee Noteholders are continuing to act reasonably in support of the Transaction and Amended CBCA Plan.

Representations of the Supporting Noteholder

The Supporting Noteholder hereby represents and warrants to Sherritt that:

• (a) as at the date hereof, the Supporting Noteholder owns or exercises control or direction over the full aggregate amount of the Existing Notes set forth on its signature page to this Agreement and does not own or exercise control or discretion over any other Existing Notes;

• (b) it has all necessary power, authority, capacity and right to enter into this Agreement and to carry out each of its obligations under this Agreement; and

• (c) this Agreement has been duly executed and delivered by it and constitutes a valid and binding obligation of the Supporting Noteholder enforceable against it in accordance with its terms.

• Representations of Sherritt

Sherritt hereby represents and warrants to the Supporting Noteholder that:

• (a) it has all necessary power, authority, capacity and right to enter into this Agreement and to carry out each of its obligations under this Agreement; and

• (b) this Agreement has been duly executed and delivered by it and constitutes a valid and binding obligation of Sherritt enforceable against it in accordance with its terms.

• Except as expressly provided in this Agreement and subject to the stay of proceedings granted by the Court in the CBCA Proceedings, nothing herein is intended to, or does, in any manner waive, limit, impair, or restrict any rights of the Supporting Noteholder or the ability of the Supporting Noteholders to protect and preserve its rights, remedies and interests, including its claims against Sherritt.

• This Agreement shall terminate, and be of no force or effect, upon the earlier of the following: (i) the completion of the Transaction pursuant to the Amended CBCA Plan; (ii) a breach by Sherritt of any of its obligations under this Agreement or the Term Sheet; (iii) a breach by the Supporting Noteholder of any of its obligations under this Agreement or the Term Sheet; (iv) the date on which this Agreement is terminated by mutual agreement

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between Sherritt and the Supporting Noteholder; or (v) October 30, 2020, provided that with respect to a termination event under item (ii), the Supporting Noteholder shall first provide written notice to Sherritt and such termination event shall be subject to a three-day cure period, following which, if such breach is not cured within such three-day period, this Agreement shall terminate without the requirement for any further or other notice, and provided further that with respect to a termination event under item (iii), Sherritt shall first provide written notice to the Supporting Noteholder (or to counsel to the Ad Hoc Committee Noteholders on the Supporting Noteholder’s behalf) and such termination event shall be subject to a three-day cure period, following which, if such breach is not cured within such three-day period, this Agreement shall terminate without the requirement for any further or other notice.

1. In the event of a breach by either Sherritt or the Supporting Noteholder of its respective obligations under this Agreement or the Term Sheet (in such case, each a “ Breaching Party ”), the Breaching Party shall forthwith notify the other party of any such breach by the Breaching Party of its obligations under this Agreement or the Term Sheet.

2. This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

3. Each of the parties understands and agrees that money damages would not be a sufficient remedy for any breach of this Agreement and that the parties shall be entitled to seek specific performance and/or injunctive or other equitable relief as a remedy for any such actual or threatened breach, without proof of actual damages. Such remedy shall not be deemed to be the exclusive remedy for any such breach of this Agreement but shall be in addition to all other remedies available at law or in equity.

5. Time shall be of the essence of this Agreement.

6. Subject to section 2(d) of this Agreement, the Supporting Noteholder hereby consents to the disclosure by Sherritt of the substance of this Agreement and the Term Sheet in any press release containing information with respect to Transaction and to the filing by Sherritt of this Agreement (including the Term Sheet) with the Court or as may be required pursuant to applicable securities laws, provided that Sherritt shall provide a draft of any such press release in advance to counsel to the Ad Hoc Committee Noteholders and incorporate any reasonable comments made by the Ad Hoc Committee Noteholders that are acceptable to Sherritt acting reasonably.

7. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same instrument, and it shall not be necessary in making proof of this Agreement to produce more than one counterpart.

[Signature page follows]

This Agreement is dated as of June 10, 2020.

Name of Supporting Noteholder:

[Name of Supporting Noteholder Redacted]

Per: [Redacted] Name: Title:

Per: [Redacted] Name: Title:

Address and e-mail for notice under the Agreement:

[Redacted]

Series of Existing Notes	Principal Amount Held	Custodian / CDS Participant
8.00% senior unsecured debentures due November 15, 2021	[Redacted]	[Redacted]
7.50% senior unsecured debentures due September 24, 2023	[Redacted]	[Redacted]
7.875% senior unsecured notes due October 11, 2025	[Redacted]	[Redacted]

This Agreement is dated as of June 10, 2020.

SHERRITT INTERNATIONAL CORPORATION

Per: “Ward Sellers” Name: Ward Sellers Title: Senior Vice President, General Counsel and Corporate Secretary

[Signature Page to Support Agreement]

Schedule “A”

(Term Sheet)

SHERRITT INTERNATIONAL CORPORATION

SUMMARY OF PRINCIPAL TERMS AND CONDITIONS RE: CBCA PLAN AMENDMENTS

This term sheet, dated as of June 10, 2020 ( the “ Term Sheet ”), describes the principal terms on which Sherritt International Corporation (“ Sherritt ”) and the Ad Hoc Committee Noteholders would agree to certain amendments (collectively, the “ Amendments ”) to the restructuring plan attached to the Circular (the “ Plan ”) and filed in the proceedings commenced by Sherritt International Corporation and 11722573 Canada Ltd., and involving Sherritt International Oil and Gas Limited, Sherritt International (Bahamas) Inc., Sherritt Power (Bahamas) Inc., SICOG Oil and Gas Limited (formerly Sherritt International (Cuba) Oil and Gas Limited), Sherritt Utilities Inc., Canada Northwest Oils (Europe) B.V., CNWL Oil (Espana) S.A., and Madagascar Mineral Investments Ltd., under the Canada Business Corporations Act (the “ CBCA ”) before the Ontario Superior Court of Justice (Commercial List) (the “ Court ”) on February 26, 2020 (the “ CBCA Proceedings ”).[1] The Amendments will be effectuated pursuant to an amended Plan (the “ Amended Plan ”). Capitalized terms used in this Term Sheet and not otherwise defined shall have the meanings set out in Section V of this Term Sheet. The provisions of this Term Sheet shall become effective on the Effective Date pursuant to the Amended Plan.

This Term Sheet and the information contained herein is strictly private and confidential and is not to be disclosed in any manner whatsoever without the prior written consent of Bennett Jones LLP, as counsel to the Ad Hoc Committee Noteholders, and of Goodmans LLP, as counsel to Sherritt. This Term Sheet is for discussion and settlement purposes only. This Term Sheet is not an offer with respect to any securities or a solicitation of votes with respect to a restructuring plan. This Term Sheet shall not be construed as (i) an offer capable of acceptance, (ii) a binding agreement of any kind, (iii) a commitment to enter into, or offer to enter into, any agreement, or (iv) an agreement to file any restructuring plan or commence any restructuring proceedings or consummate any transaction or to vote for or otherwise support any restructuring plan. This Term Sheet is subject to, among other things, negotiation and execution of definitive documentation.

1 This Term Sheet does not purport to summarize all of the terms, conditions, representations, warranties and other provisions with respect to the transactions referred to herein, which transactions will be entered into on the basis of mutually satisfactory definitive documentation after, among other things, receipt of necessary internal and external approvals.

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I. AMENDMENTS

Amendments to the Plan

The Amendments shall be implemented pursuant to the Amended Plan binding all Noteholders and Sherritt.

The Amendments shall provide that:

• (a) the “Notes Exchange Ratio” (as defined in the Plan) shall be amended from 0.5 under the Plan to 0.54 under the Amended Plan;

• (b) in addition to the consideration to be provided to the Noteholders that is set out in the Plan, each Noteholder shall also receive on the Effective Date its Noteholder Pro Rata Share of the New Junior Notes as additional consideration for the exchange of its Existing Notes pursuant to the Amended Plan; and

• (c) the terms of the New Second Lien Notes and the New Notes Indenture as set forth in the Plan and described in the Circular shall be amended as follows:

• (i) the maturity date shall be amended from April 2027 to November 2026;

• (ii) the redemption price in respect of any optional redemption by Sherritt of the New Second Lien Notes in advance of the maturity date in respect of the New Second Lien Notes shall be 107% of the principal amount of New Second Lien Notes so redeemed;

• (iii) the redemption price in respect of the New Second Lien Notes on the maturity date in respect of the New Second Lien Notes shall be 107% of the balance of the principal amount of the New Second Lien Notes then outstanding;

• (iv) the aggregate amount of all premium payments paid by Sherritt in respect of any optional redemptions set forth in (ii) above during the term of the New Second Lien Notes, plus the premium payment paid by Sherritt on maturity set forth in (iii) above shall not be less than $25 million; and

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• (v) the purchase price on a Change of Control Offer (as defined in the New Notes Indenture) shall be amended from 101% to 107%.

II. IMPLEMENTATION OF THE AMENDMENTS

Implementation

Subject to the terms of this Term Sheet, the Amendments shall be included in, and implemented pursuant to, the Amended Plan in the CBCA Proceedings.

CBCA Timeline and Conditions

The actions necessary to structure and implement the Amendments pursuant to the Amended Plan in the CBCA Proceedings will be completed within the following timeline and subject to the following conditions (which may be waived or amended as agreed by Sherritt and the Majority Ad Hoc Committee Noteholders, each acting reasonably):

• (a) Sherritt and the Ad Hoc Committee Noteholders shall agree to the Amendments pursuant to this Term Sheet and Sherritt shall publicly announce the Amended Plan pursuant to this Term Sheet on or prior to June 11, 2020. The press release shall include that the Ad Hoc Committee Noteholders have agreed to vote in favour of the Amended Plan and the aggregate holdings of the Ad Hoc Committee Noteholders;

• (b) the Ad Hoc Committee Noteholders shall vote in favour of the Amended Plan by the Early Consent Date;

• (c) the Amended Plan shall have been approved by the Court pursuant to a final order acceptable to Sherritt and the Majority Ad Hoc Committee Noteholders, acting reasonably by no later than August 14, 2020 (or such other date as may be agreed by Sherritt and the Majority Ad Hoc Committee Noteholders, each acting reasonably).

III. OTHER TERMS AND CONDITIONS OF THE AMENDMENTS

New Junior Notes Indenture

The New Junior Notes Indenture shall be satisfactory to Sherritt and the Majority Ad Hoc Committee Noteholders, acting reasonably.

Ad Hoc Committee Noteholders’ Advisors

Sherritt shall pay the reasonable fees and expenses of Bennett Jones LLP, the legal advisors to the Ad Hoc Committee Noteholders, in accordance with the written agreement entered into between Sherritt and Bennett Jones LLP.

Releases

The “Released Parties” as defined in the Plan shall be amended as part of the Amended Plan to also include the Early Consenting Noteholders (as defined in the Plan) and their respective current and

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former directors, officers, managers, partners, employees, financial advisors, legal counsel and agents, each in their capacity as such.

Definitive Documentation

Sherritt and the Ad Hoc Committee Noteholders shall, in good faith, negotiate, execute and deliver definitive documentation (the “ Definitive Documentation ”), as applicable, necessary to implement the Amended Plan in accordance with the terms set out in this Term Sheet and in form and substance acceptable to Sherritt and the Majority Ad Hoc Committee Noteholders, acting reasonably.

Public Announcements

All public announcements in respect of the Amended Plan shall be made solely by Sherritt, provided that any such public announcements shall be in form and substance acceptable to Sherritt and the Majority Ad Hoc Committee Noteholders, acting reasonably, and provided further that nothing shall prevent a party from making public disclosure in respect of the Amended Plan to the extent required by applicable law, subject to any applicable confidentiality agreement(s).

• No Admission Nothing in this Term Sheet is or shall be deemed to be an admission of any kind.

Currency All amounts in this Term Sheet are in CAD dollars unless otherwise stated.

IV. OTHER MATTERS

Matters Subject to In this Term Sheet, unless otherwise specifically provided, where Approval, Satisfaction or matters are subject to the approval, agreement, acceptance, Consent of a Party satisfaction and/or consent of a party, such matters shall be subject to such party acting reasonably.

Governing Law This Term Sheet shall be governed by the laws of the Province of Ontario and the laws of Canada applicable therein

V. DEFINITIONS

Ad Hoc Committee “ Ad Hoc Committee Noteholders ” means, collectively, those Noteholders holders of Existing Notes represented by Bennett Jones LLP as legal counsel as at the date of this Term Sheet as confirmed to Goodmans LLP by Bennett Jones LLP in writing on the date of this Term Sheet.

Circular “ Circular ” means Sherritt’s management information circular dated March 6, 2020.

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Early Consent Date

“ Early Consent Date ” means the early consent date to be determined by Sherritt, which shall be no earlier than July 3, 2020, or such later date as may be determined by Sherritt.

Effective Date

“ Effective Date ” shall have the meaning given to such term in the Plan.

Existing Notes

“ Existing Notes ” means, collectively, Sherritt’s 8.00% Senior Unsecured Debentures due November 15, 2021, 7.50% Senior Unsecured Debentures due September 24, 2023 and 7.875% Senior Unsecured Debentures due October 11, 2025.

Interim Order “ Interim Order ” means the Interim Order granted by the Court on February 26, 2020 in the CBCA Proceedings, as may be amended by the Court.

Majority Ad Hoc “ Majority Ad Hoc Committee Noteholders ” means Ad Hoc Committee Noteholders Committee Noteholders holding a majority of the Existing Notes held by all Ad Hoc Committee Noteholders at the applicable time.

New Junior Notes “ New Junior Notes ” means new unsecured notes issued by Sherritt on the Effective Date pursuant to the Amended Plan. The New Junior Notes shall be in an aggregate principal amount of $75 million with (i) a 9-year maturity, (ii) an annual interest rate of 10.75% payable semi-annually in cash or PIK, at Sherritt’s election, (iii) a covenant lite package, (iv) a threshold of 66 2/3% in respect of any amendments to the New Junior Notes relating to matters that would require unanimous approval under the New Notes Indenture, (v) non-callable for the first 3 years, and callable at par thereafter, and (vi) such other terms as may be reasonably agreed to by Sherritt and the Majority Ad Hoc Committee Noteholders.

New Junior Notes Indenture

“ New Junior Notes Indenture ” means the indenture pursuant to which the New Junior Notes will be issued.

New Notes Indenture “ New Notes Indenture ” shall have the meaning given to such term in the Plan, as amended hereby.

New Second Lien Notes “ New Second Lien Notes ” shall have the meaning given to such term in the Plan, as amended hereby.

Noteholder Pro Rata “ Noteholder Pro Rata Share ” means, with respect to each Share Noteholder, the percentage that the principal amount of Existing Notes held by such Noteholder bears to the total principal amount of Existing Notes held by all Noteholders immediately prior to the Effective Time (as defined in the Plan).

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Noteholders

PIK

“ Noteholders ” means the holders of the Existing Notes.

“ PIK ” means payment in kind.